Could you imagine how difficult it is identify what is Value-Added and what can be NonValue-Added in the enviroment, that there is not physical product move? Maybe paper printing, somebody walking somewhere. Nothing is obvious as in production. So how to handle this?
This article covers:
- What is Value-Added activity?
- What is NonValue-Added – example
- Value-Added vs NonValue-Added exploration
- NonValue-Added, but required
- Improvement – NVA elimination
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What is Value-Added activity?
Changing product, delivering required information, or service with direct impact on customer needs, are value added activities. Everything else is non-value added.
Everything starts with customer needs. Understand first, what are his real expectations. Voice of customer and Kano model will help you with it.
Process mapping and Gemba walk are essential tools for non-value added identification. To improve, we must understand current process and its challenges first.
What is NonValue-Added – example
Higher level process map
Let’s have a goods ordering process. First what I suggest is to understand process from higher level perspective.
When need is identified, paper requisition is created by requestor. Then buyer process request to electronic system. Afterwards required goods are ordered. High level process looks logical and value added. When we look to process, we do not understand, can look easy. But is not. Requestors are not satisfied, because it takes too long time.
Detailed level process map
Once you and team understands what is whole process about, try to explore more details by using detailed process mapping.
Let´s have a closer view to each process. For each need, requestor must get quotations from 3 different suppliers, to choose the best price. Created paper request form must be signed by budget owner. signed form is scanned, sent via email to buyer. Original must be delivered to buyer for storing purposes.
Buyers process is not simple, either. He reviews request form for all required information. Then retypes information to electronic system. Pdf form copy must be added to the system too. After request number generation, request email is sent to supplier.
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Value-added vs NonValue-Added exploration
Next step is to think about what is really needed by customer, and what activity can be skipped.
Let’s identify value added activities. What supplier really needs is just an information about request. 3 quotations are required because of corruption. but supplier does not care, it is important for internal finances, therefore mandatory and value added.
Request form is value-added. Delivers information to buyer. Signature is non value added. But budget owner requires this approval. Request scanning, sending email, paper to buyer is non value added. This is overprocessing waste. The same information is delivered twice.
Request review can be value added, because we make sure, goods supplier have correct information. Electronic request is overprocessing too. There are two requests created. There are possible typo mistakes during request re-typing.
Request number and email is value-added.
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NonValue-Added, but Required
Before eliminating non-value added activities ask: is there any other good reason, why this activity is there? good reason can be legislation requirement. Financial audit is a very good reason too.
Improvement – NVA elimination
- Create future state process map, prior starting improving headlong.
- Create plan to reach dreamed future state.
- Identify task list with each task owner
- Review progress regurarly
Ideal would be: to reduce multiple required quotations. After agreement with finances, 3 different quotation will be required in purchases exceeding 1500 dollars. This will speed up 60% of quotations.
There is a opportunity to have only one electronic request. Budget owner can approve electronic form. Pdf email sending and paper delivery will not be required. Buyer just receives info about request through system. Electronic system will not allow to continue without required fields filled, so request review is not required. Just number generation.
This is how future process will look like:
After future state identification team have created plan to reach this desired process.
I recommend you to follow 8 wastes of lean to do changes described in this video. It will help you to identify right potential root causes of your problem. Find the template on the link below.
I have reviewed top 11 six sigma green belt and black belt training and certification companies. Result is the table on the picture below. There are several criteria, that might help you to choose the right certification provider. So it will save you time and money by choosing the right provider.
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Yours sincerely Erik